Caltex in court over Woolies deal

Petrol station owners have declared war on Caltex in a bid to save their jobs and keep petrol prices down.

On New Year's Eve, owners sought a nationwide injunction in the Federal Court in Victoria to stop Caltex from opening more co-branded service stations with Woolworths.

Service station owners, who pay Caltex a franchise fee to operate under its name, are angry about the Woolworths deal that undercuts their price by four cents a litre when petrol buyers produce a docket from the supermarket.

Chairman of the Caltex Ampol National Franchise Council David Clark said: "It has become a war because Caltex has made it a war.

"Caltex is prepared to see 19 per cent of its service stations close down. It is culling small franchise holders by sending them broke."

The service station owners pay between $50,000 and $200,000 to use the Caltex brand on their forecourts. "Now those deals are not worth the paper they are written on," Mr Clark said.

Caltex has opened 30 co-branded sites with Woolworths where petrol prices have been as much as 20 cents a litre cheaper than at other service stations. "But once the little guys have been knocked out of the market, who will be left to keep the prices down?" Mr Clark asked.

"Consumers are already paying the price of this deal. What about the little old lady without a car who is now paying more for her groceries to cover the cost of the cheap petrol?"

He warned that Caltex and Woolworths, plus Shell, which has a similar deal with Coles, would become "money munching machines that can charge whatever they like for petrol".

The warning follows similar dire predictions from the Australian Consumers' Association, which last month said consumers were already paying more for their groceries.

Franchise holders decided to take the Federal Court action after seeing a leaked Caltex memo, which said the company intended to use "fear, uncertainty and doubt" to destabilise the franchise holders.

Mr Clark said the injunction to stop the roll out of co-branded sites was an attempt to get Caltex to consult its franchise holders.

But Caltex managing director Dave Reeves said he was disappointed the action had been taken. "Caltex will always strive to ensure an outcome for any affected franchisee which is fair and reasonable in the particular situation," he said. "Its franchisees remain as important as ever.

"The competition to which some franchisees are referring already exists in the form of Woolworths and Coles Express branded sites. Woolworths, with or without Caltex, would have developed a national retail fuel network, in response particularly to the roll out of the Coles Myer-Shell offer.

"The proposed final agreement for an association with Woolworths aims to secure Caltex's long-term position in retail fuel and convenience marketing in Australia."